Likely Consequences of Nenshi’s Civic Tax

Blog, Environment, Frontier Centre, Housing Affordability, Local Government, Poverty, Property Rights, Taxation, Uncategorized

Little children used to be encouraged to stay inside the lines when colouring.  That was until the wave of postmodernist educators encouraged children to exercise their creativity. No need to bother staying inside the lines.

We know that Calgary’s Mayor Naheed Nenshi is a former educator.  Perhaps he is a postmodernist educator too since his proposed new civic tax will encourage people to go outside the Calgary lines.

Nenshi is musing about convincing the feds to add one percent to the GST to Calgary goods and services. The extra money would go to him (the city government), and he will use it to pay for infrastructure such as libraries, recreation areas, and a new public art gallery.

One unintended result of the civic tax may be a fair bonanza for outlying municipalities, should they wish to exercise some fiscal discipline and not emulate Nenshi.  Airdrie and Okotoks might be the big winners, with Cochrane and Strathmore perhaps not too far behind.

Businesses that sell large-ticket items in these communities outside the Calgary city limits will be the immediate beneficiaries. I can  already see in my mind’s eye the adds from Okotoks Honda! One percent on a $50-thousand car is real money.  And while you stop at the dealership on Saturday afternoon, you can fill up at the local (cheaper) gas stations, stop at the local Wal-Mart, Costco, Canadian Tire, Home Depot when you need to, eat at the local eateries, and so forth.

Nenshi’s civic tax could spark a mini boom in these smaller markets.

The tax could also have a negative environmental impact, encouraging the already-problematic Calgary sprawl. Want to buy a house in the suburbs? If you buy one slightly further, on the other side of the Calgary municipal line, you could save anywhere between three to five thousand dollars.  That would be a nice down payment on that new Civic. The incentive to stay outside the line will be significant.

If I were Okotoks’ Mayor Bill Robertson or Airdrie’s Mayor Peter Brown, I would be cheering for Nenshi and his new tax. Raheem at Okotoks Honda will have an even bigger smile on his face. He’ll be cheering for Nenshi and for his new Civics.